Obamacare sites cost more than Facebook, Twitter and LinkedIn

An array of issues surrounding the recently launched websites for President Barack Obama’s Affordable Care Act have rendered them largely unavailable during the last week, and a lack of funding might not be to blame.

With the official launch of so-called Obamacare last Tuesday,
millions of Americans flocked instantly to brand new Web portals
where people could sign up for inexpensive health insurance
plans. Bugs, glitches, an overload of traffic and other snafus
resulted in many of those sites voluntarily shutting down while
programmers picked through code and attempted to revamp the
websites in recent days, but a new investigation by Digital
Trends’ Andrew Couts suggests that a stupendous amount of money
was involved in getting some of those sites off the ground — only
for them to crash and burn almost instantly.

Couts has since revised his original estimate since going live
with his report on Tuesday this week, but his latest round of
research led him to assume that American taxpayers spent over
$500 million on the Obamacare websites that have been plagued by
problems since their launch one week earlier.

The website for healthcare.gov, Couts wrote, has been so prone to
problems “that its track record for failure is challenged only
by Congress.” Perhaps an even better example of something the
two entities have in common is the vast amount of money spent on
making either all too unbearable.

According to Couts’ calculations, data from the US Government
Accountability Office and subsequent IT contracts he has stumbled
on suggest that at least half-a-billion dollars has been invested
in Healthcare.gov and other similar websites so far, which might
not seem all too much when compared to other endeavors
entertained by Washington.

Compared to other websites, though, Couts says the cost is
astronomical.

From his DigitalTrends piece:

“Given the complicated nature of federal contracts, it’s
difficult to make a direct comparison between the cost to develop
Healthcare.gov and the amount of money spent building private
online businesses. But for the sake of putting the monstrous
amount of money into perspective, here are a few figures to chew
on: Facebook, which received its first investment in June 2004,
operated for a full six years before surpassing the $500 million
mark in June 2010. Twitter, created in 2006, managed to get by
with only $360.17 million in total funding until a $400 million
boost in 2011. Instagram ginned up justt $57.5 million in funding
before Facebook bought it for (a staggering) $1 billion last
year. And LinkedIn and Spotify, meanwhile, have only raised,
respectively, $200 million and $288 million.”

Indeed, not only is the $500 million blown on Obamacare websites
a lot by Washington standards, but even some of the most
successful names in Silicon Valley history spent fractions of
that sum to steer their projects to the pinnacle of the Web.

“There have been more expensive government boondoggles over
the years,” American Thinker blogger Rick Moran added.
“But as a metaphor for government incompetence, this example
takes the cake.”

Couts settled at his latest estimate by taking into account the
“almost $394 million from fiscal year 2010 through March 2013”
awarded in federal contracts to build the “federally facilitated
exchanges,” or FFEs, including healthcare.gov and similar sites.
Not all of that figure was used towards building the site, Couts
determined, but roughly $363 million did get funneled towards
technology-related costs, which was then topped off by at least
$150 million just during 2012 and 2013, according to budget
requests filed by the Center for Medicare and Medicaid Services
to go towards the sites.

“At this point I can only speculate on the total cost to build
out Healthcare.gov and the related FFEs. Based on the available
data, however, a conservative estimate puts the cost so far at
over $500 million,” he wrote.